Naomi Company has 200 employees who are expected to receive benefits under the company's defined benefit pension plan. The average number of service years per employee is 10 years. The actuary for the company's pension plan calculated the following net gains and losses: For the year ended December 31 (Gain) or Loss 2019 2020 2021 ($350,000) 470,000 (750,000) Prior to 2019, there was no unrecognized net gain or loss. Information about the company's projected benefit obligation and market-related asset values follows: As of January 1 2019 Projected benefit obligation $2,300,000 2020 $2,450,000 2021 $2,840,000 Market-related asset values 2,150,000 2,520,000 2,600,000 Required: Based on the above information, prepare a schedule which reflects the amount of unrecognized net gain or loss to be amortized by the company as a component of pension expense for the years 2019, 2020, and 2021, using the corridor approach.
Naomi Company has 200 employees who are expected to receive benefits under the company's defined benefit pension plan. The average number of service years per employee is 10 years. The actuary for the company's pension plan calculated the following net gains and losses: For the year ended December 31 (Gain) or Loss 2019 2020 2021 ($350,000) 470,000 (750,000) Prior to 2019, there was no unrecognized net gain or loss. Information about the company's projected benefit obligation and market-related asset values follows: As of January 1 2019 Projected benefit obligation $2,300,000 2020 $2,450,000 2021 $2,840,000 Market-related asset values 2,150,000 2,520,000 2,600,000 Required: Based on the above information, prepare a schedule which reflects the amount of unrecognized net gain or loss to be amortized by the company as a component of pension expense for the years 2019, 2020, and 2021, using the corridor approach.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Naomi Company has 200 employees who are expected to receive benefits under the
company's defined benefit pension plan. The average number of service years per
employee is 10 years. The actuary for the company's pension plan calculated the
following net gains and losses:
For the year ended December 31
(Gain) or Loss
2019
2020
2021
($350,000)
470,000
(750,000)
Prior to 2019, there was no unrecognized net gain or loss.
Information about the company's projected benefit obligation and market-related asset
values follows:
As of January 1
2019
Projected benefit obligation
$2,300,000
2020
$2,450,000
2021
$2,840,000
Market-related asset values
2,150,000
2,520,000
2,600,000
Required:
Based on the above information, prepare a schedule which reflects the amount of
unrecognized net gain or loss to be amortized by the company as a component of pension
expense for the years 2019, 2020, and 2021, using the corridor approach.
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